When I was growing up in Seward, Nebraska, and had some change burning a hole in my pockets, I loved to dash to the local grocery store – we would ride our bikes with the banana seats and chopper handlebars – and pick up a pack of Bubblicious chewing gum. I was partial to grape.
As I write this on Friday, it appears that those popping sounds in Seward – and other Farm Belt burgs – aren’t just from bubble gum stretching to the breaking point. It’s also the sound of commodity prices, which given their current trajectory, won’t be resulting in nearly as much money being spent in five and dimes in the coming year, on candy or whatever.
A check of the AgWeb farm commodity report today (pulled from Friday’s Chicago Board of Trade) shows that corn has now dropped below $3/bushel, to $2.93. Soybeans Friday dropped below the $8/bushel threshold. Hard to believe corn itself was $8+ per bushel less than six months ago.
I’ve blogged repeatedly about the commodity surge and its impact in
I also just discovered this prescient National Public Radio “Money Map” story datelined in Seward, filed back in July. The reporter visited
The NPR correspondent spoke to a farmer in the Seward area who was glad for the high prices, but compared farming to gambling in Vegas. Seward’s John Deere dealer, Russ Stigge, was also pleased by a 30% rise in sales, but he offered this golden nugget of wisdom:
"This commodity bubble will burst just like the housing bubble burst and the tech bubble burst," Stigge says. "We're very pleased with the marketplace right now, but we're not so naïve to think this is going to last forever."
This Reuters story from today is talking like corn prices could drop down almost another buck to the loan rate if the global economy doesn’t improve, and obviously the ethanol economy itself is now experiencing a raging hangover, now that the sun has disappeared for VeraSun and other distilleries.
It didn’t take long to chew through that pack of bubblegum, did it?